Titanic sinks! Insurance claims mount for passengers, cargo p4

We are finishing up our series of posts to commemorate the 100th anniversary of the sinking of the RMS Titanic. There is something about the disaster, something that has particularly captured the imagination for the past century. For us, of course, it’s a great story about insurance coverage and claim payments. But for others, it is the folly of believing the ship to be unsinkable; or it is the appalling loss of life, or the fact that so many famous people were on the ship; or it is the sheer luxury of the ship that passengers enjoyed for a few short days. Titanic has become a metaphor for just about everything: hubris, glamour, human error and class differences.

If the sinking left everyone in shock, at least the insurance claim process seems to have gone smoothly. As we discussed in our last post, passengers, property owners and the White Star Line were fortunate that the “year and a day” rule was no longer the norm.

We discussed life insurance claims and some of the problems faced by beneficiaries in our April 14 post. The property insurance claim process was different.

Before the claims process could begin, the insurance companies needed proof that the ship had foundered. In 1912, when a ship was lost at sea, the surviving crew signed an “official protest.” The protest was a document that briefly described the circumstances of the ship’s loss and what part of the hull and cargo were gone. In the case of Titanic, everything was lost.

Anyone making a property insurance claim then presented a copy of the protest, the insurance policy and proof of the value of the goods. The proof of value was most often a bill of lading, a copy of the ship’s manifest that proved the goods were on the ship and, finally, the invoice from the country of origin certified by the U.S. Consul at the port where the cargo was loaded.

One thing on the claimants’ side was that the loss of Titanic was common knowledge. Most insurers did not insist on seeing the protest. And, the fact that the Titanic was a total loss made it easier to collect the insurance proceeds. Had the cargo been damaged but recovered, the insurance company would have had to determine the difference in value, and that was no easier in 1912 than it is today.